Consumer & Business Markets and Product Classification (Unit 3)

 

Consumer & Organisational Markets

 https://ebooks.inflibnet.ac.in/mgmtp14/chapter/product-life-cycle/

Types of Organisational Markets

Industrial or organisational markets may be of different types

•       Industrial Market

•       Reseller Market

•       Government Market

Organisational Markets are different in many ways from consumer markets. They are different in their market characteristics, nature and structure of demand, nature of buying unit, in types of decision they take and the way the decision are taken.

Characterstics of Organisational Markets and the way they are  different.

Market Structure and Demand

•       Fewer but larger buyers

•       Geographically Concentrated

•       Derived Demand

•       Inelastic Demand

•       Fluctuating Demand

  

The nature of buying unit

•       More buyers are usually involved in decision

•       More trained buyers

•       More professional

 

Types of decisions

•       More complex buying decision

•       Take longer time to take decision

•       Process is more formalised

•       Buyers and sellers are more dependent on each other

•       Marketers build more close long run relationships with customers

 

Other Characterstics

•       Direct Purchasing

•       Reciprocity

•       Leasing

•       Systems Buying

PRODUCT CLASSIFICATION

Types of Product (Classification)

Products can be broadly classified as 

1. Consumer Product

2 Industrial Product

1. Consumer Product

(a) Convenience

           Staples - paste, soap, food items (Daily use kitchen and bathroom products)

          Impulses - chocolates, fashion wear ( That are bought without planning by impulse)

           Emergency - umbrella, medicine ( To ward off some trouble or for emergency)

(b) Shopping goods

      Uniform - cheap garments, vegetable, furniture. The seller talks price (There is hardly any differentiation between them.)

       Non uniform - clothes , ( sold on the basis of features, quality, price. Features are more important than price.(Product differentiation is vible and important)

(c). Specialty Goods 

- consumer makes an special effort to search and buy. Eg Branded clothes, cars.

(d) Unsought Goods 

- people don't like to buy but generally pushed into buying. Eg insurance.

On the basis of Durability and Tangibility consumer goods can be -

1  Durable, (That last for some time and can be used many times over the years.)

2  Non-durable, & (That are used up in short time by one or a few times use.)

3  Services (Intangible benefits that are intangible)

2. Industrial Products

Industrial Goods

• Industrial Goods are bought by individuals and organizations for further processing. or for use in conducting a business.

On the basis of how they enter production process and what they cost the three groups of industrial goods goods are

(a)  Material & Parts

(b)  Capital Items

(c)   Supplies & services

a) Materials & Parts ---are industrial goods that enter the manufacturer's product completely, including raw materials and manufactured materials and parts.

Raw Material can be  - wheat, cotton, minerals, petroleum

Manufactured Materials and Parts ---- for example iron, yarn, cement

b) Capital Items --- are industrial goods that enter the finished product partly, including. installations and accessory equipment..

•Installations consists of building, fixed equipment ment like generators, computers, elevators.

*Accessory Equipment - hand tools, typewriter, desks

c) Supplies & Services are industrial goods that do not enter the finished product at all.

• Supplies are convenient goods of the industrial field as they are purchased with minimum effort or comparison.-paint nails brooms, coal, typing, computer parts,  paper.

• Business Services include maintenance and repair services business advisory sevices (Legal or management consultancy)